How To Get Your First Bitcoin Without Investing
Bitcoins and other cryptocurrencies are making big news, and with good reason. For the first time in history, people have access to a currency that is freely traded and exchanged without any involvement from governments and banks. But all cryptocurrencies have a limited number of coins available, so how can you get your hands on them without forking out any traditional money?
1. Mine them
All cryptocurrencies use incredibly complicated mathematical calculations to generate coinage. It’s an odd idea, that money can be created by maths, but it works. The flip-side of this is that you can actually create Bitcoins (and other cryptocurrencies) by doing the calculations.
For normal people, the process behind Bitcoin mining is unnecessarily complex. It’s all about hashing, nonces, majority consensus and blockchains, none of which makes any sense without a great deal of explanation. Suffice it to say that a computer can do the necessary work!
To start mining Bitcoins, all you need is a computer and some software that is freely available online. However, there’s a downside: as interest in mining grows, so competition increases and the process becomes more difficult. This is done deliberately, so that coins get harder to mine and don’t enter circulation too quickly. In real terms, it means that you have to mine faster or the return on your time is outweighed by the power costs of running the computer.
The practical upshot of this is that there has been a sort of “arms race” in the mining industry. Back when Bitcoins first appeared, you could do it with your computer’s CPU at home. As competition grew, graphics card GPUs became the only appropriate chips to do the work – they calculate this sort of thing faster, so the returns still outweighed the power costs.
In the current competitive environment, there are only three feasible ways to mine Bitcoins:
- Invest in “mining rigs” with dedicated ASICs (microchips) that do nothing but mine, mine, mine, all day long.
- Invest in cloud-based mining setups, where you can buy time on dedicated rigs without having to purchase any hardware.
- Join a mining consortium where your puny computer donates its processing time and the power of the combined group does the work for shared returns.
Only the last option is free and, to be honest, the returns are very small. For most people, mining without investing has a negative return on investment.
2. Work for them
In the same way as you can perform small tasks for a few cents on a large number of sites around the Internet, so you can work for bitcoins and other cryptocurrencies.
Since Bitcoin has become more mainstream, there has been a flood of new sites offering tiny amounts in return for viewing websites (the “pay to click” or PTC market) and for performing tasks (the “get paid to” or GPT market). They’re easy to find with a simple search.
There are two problems with this approach:
- Since a Bitcoin is worth several hundred dollars, most sites use milli- or micro-bitcoins, the exact value of which is often hard for people to calculate.
- The PTC and GPT markets are widely considered the two worst culprits for scams. They hold onto your earnings until you reach a payout level (which takes a long time), then disappear without paying.
The smallest denomination of a bitcoin is called a “satoshi”, in honor of Satoshi Nakamoto who created the currency, and is one hundred millionth of a coin. Most sites offer a few satoshis in return for your work – at current rates of exchange, that’s one or two tenths of a cent for spending 20 seconds on a web site or doing a simple job. Hourly rates work out at 50 cents or less, even if the site stays around long enough to pay you.
3. Get them free!
If you really don’t want to pay for your bitcoins, one of the best ways to get them is to find “faucets”. As their name suggests, cryptocurrency faucets offer a flow of bitcoins and other cryptocurrencies to anyone who wants them. It sounds crazy, but you really do get them for free.
Most faucets require that you fill out a Captcha to get your freebies and pay out on a strict cycle: once per day, once an hour, once every so-many-minutes, as determined by their owners. Some offer games to determine how much you get, some use a random selection of values and others simply give a set amount.
Cryptocurrency faucets have disadvantages as well as benefits:
- They usually only offer a few satoshis per visit, so they won’t make you rich.
- The sites pay for the free bitcoins with advertising, so some will pop up half a dozen windows and flood your browser with multiple advertisements.
- Some keep hold of your earnings until you reach a large enough amount to make a transaction worthwhile, which leaves a potential opening for scams.
On the positive side, the money really is free – you’re just trading your time (and potential interest in the advertisements) in return. Most Bitcoin faucets pay through micro-transaction systems like Microwallet or Coinbox, so you don’t need to wait to find out if they’re legitimate and can accumulate satoshis from multiple faucets for a quicker payout.